Budget plans imploding, Congress is heading home

The House bill would have embraced the sequester, deep automatic budget cuts designed to shrink the federal government. The Senate bill would have ended it, restoring billions of dollars for housing, roads and bridges.

This week, congressional Republicans tacitly rejected both approaches to next year’s budget, leaving lawmakers wondering how they will manage to keep the government open past September, much less resolve a broader conflict over the rising national debt.

As Congress prepared to leave town for a five-week summer break — the Senate on Thursday, the House on Friday — the prospects for progress on any front in the endless budget war appeared dim. Without an agreement to deal with the sequester and fund federal agencies in fiscal 2014, the government will shut down Oct. 1, barely three weeks after lawmakers return to town. A few weeks after that, the Treasury will face the risk of default unless Congress can agree to raise the $16.7 trillion federal debt limit.

Leaders of both parties say they want to avoid those outcomes, either of which could seriously damage the sluggish economic recovery. But Republicans have refused to open official negotiations with Democrats, either over a budget blueprint for 2014 or over specific spending bills, such as the $54 billion transportation and housing measure that Senate Republicans torpedoed Thursday.

“This is so absurd,” Sen. Susan Collins, R-Maine, lamented after every other member of her party voted to block the bill she had painstakingly drafted with Senate Democrats. Collins is among a growing number of Republicans who say the sequester cuts are damaging the government’s ability to perform essential functions such as educating the children of U.S. soldiers and paying private landlords to house the poor.

The Republican-led House’s chief accomplishment for the week was a bipartisan Wednesday vote to deal with rising student-loan interest rates, readying that legislation for President Obama’s signature.

The House focused during its last days before vacation on bills aimed at rousing the party’s conservative base that have little chance of becoming law: The “STOP IRS Act.” The “Stop Government Abuse Act.” And the “Regulations in Need of Scrutiny Act.” Before they leave Friday, House members will for the 40th time vote on a GOP measure to effectively repeal Obama’s health-care law.

This week, Obama tried to revive interest in a “grand bargain” that would pair more tax revenue, long sought by Democrats, with cuts to federal health and retirement benefits long sought by Republicans. During a speech in Tennessee, he also called for an end to the sequester and sought fresh funding for infrastructure and jobs.

But Republican leaders rejected Obama’s overtures, saying that ending the sequester — part of a deal to raise the federal debt limit in 2011 — would erode their sole victory in the fight to shrink government. Even approving Collins’ transportation bill would have marked a step backward, said Senate Minority Leader Mitch McConnell, R-Ky., who twisted the arms of at least four GOP senators who Collins said had pledged to support the measure.

“Regretfully,” McConnell said in the Senate debate, any vote to ignore the sequester “will be widely viewed throughout the country that we’re walking away from a bipartisan commitment … to reduce $2.1 trillion in spending over the next 10 years.”

Collins, trying to persuade other Republicans to break with McConnell, at first struggled to be heard above the Senate’s din. That prompted an unusual outburst from Majority Leader Harry Reid, D-Nev.: “Madame President, have senators sit down and shut up, OK?” he barked at presiding officer Tammy Baldwin, D-Wis., who broke into a wide smile.

Senate Budget Committee Chairman Patty Murray, D-Wash., who worked with Collins to draft the transportation bill, said GOP leaders have maneuvered themselves into a corner. The defeat of the transportation bill came one day after House Republicans refused to support their own version of the measure, which would have set spending on transportation and housing programs at $44 billion next year, nearly 20 percent lower than the Senate bill.

“The conundrum is that Republicans know sequestration levels don’t work, but they can’t figure out how to open the door to solving this problem,” Murray said.

Obama has opened lines of communication to other GOP lawmakers in an effort to break the deadlock. White House chief of staff Denis McDonough has met several times with House Budget Committee Chairman Paul Ryan, R-Wis., and meets regularly with a group of eight Senate Republicans winnowed from the 24 who had dinner with Obama earlier this year.

That group — dubbed “the Diners Club” — includes Sen. John McCain of Arizona, which many Democrats take as a heartening sign. In recent months, McCain has emerged as the leader of a bloc of GOP senators who are fed up with tea-party gridlock and have proved willing to cut bipartisan deals to advance an immigration reform bill and several stalled presidential appointments.

The group also includes Sens. Lindsey Graham of South Carolina, Kelly Ayotte of New Hampshire, Bob Corker of Tennessee, Johnny Isakson of Georgia, Daniel Coats of Indiana, Ronald Johnson of Wisconsin and John Hoeven of North Dakota — “the people we can pass stuff with,” said a senior Democratic aide, speaking on condition of anonymity.

But after weeks of talks — including two meetings in the past two days with McDonough — McCain said the group has yet to reach agreement on the most basic issues.
“What I fear is that we’re going to again come to the edge of the cliff and all of a sudden there’s going to be these midnight meetings. That’s the worst way to legislate,” McCain said. But he joked: “It’s always darkest before it’s totally black.”